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Lord Gallacher moved Amendment No. 75:


Page 13, line 10, at end insert ("under the Arbitration Acts 1959 and 1979.").

The noble Lord said: The purpose of the amendment is to make it clear that the dispute system is to be under the Arbitration Acts and not under the agricultural code in the current agricultural holdings legislation. We accept that Section 31 of the Arbitration Act 1950 makes it unnecessary to include the statement. However, in view of the separate agricultural code of arbitration in Schedule 11 to the Agricultural Holdings Act 1986 and the dairy produce code of regulations, it is important to make it clear to the industry, which has been used to a different code, that it will no longer apply. I beg to move.

Earl Howe: I take the point that the amendment is meant to make it clear which legislation governs the arbitration procedures that are referred to in Clause 28. However, I am advised that it is not necessary to state explicitly that arbitration under the Bill—and this refers also to the arbitration envisaged in Clauses 10 and 19 and Part III of the Bill as well as Clause 28—means arbitration under the Arbitration Acts 1950 and 1979. Incidentally, I believe that there is a misprint in the Marshalled List; it refers to 1959 instead of 1950. The position is that the wording of Section 31 of the Arbitration Act 1950 makes such a reference unnecessary and also that other recent statutory provisions requiring arbitration do not contain any express reference to the 1950 Act. I hope that that explanation has reassured the noble Lord and that he will withdraw his amendment.

Lord Gallacher: I am grateful to the Minister for giving the answer that I had expected. We have achieved some limited purpose in that our comments will be recorded in Hansard, and the fact that the Arbitration Act 1950 is referred to in this and other legislation should suffice. In moving the amendment, we wished to

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put beyond doubt that this would be the new legislation as regards arbitration. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 28 agreed to.

Clause 29 [Cases where right to refer claim to arbitration under section 28 does not apply]:

Earl Howe moved Amendment No. 76:


Page 13, line 42, leave out ("and").

The noble Earl said: The need for this amendment arises because we seem to have omitted a small cog from the machinery for resolving disputes. Clause 28 gives either the landlord or the tenant the right to require that disputes relating to their rights and obligations shall be resolved by arbitration. Clause 29, however, allows the parties to adopt an alternative disputes resolution procedure if they prefer to do so, perhaps in order to save money on costs. Clause 29 also contains certain safeguards: the tenancy agreement must contain a provision for disputes to be resolved by a third party; the third party may not be appointed by the landlord or the tenant alone without the other's consent; and they must either have agreed jointly to refer the dispute to the third party, or one of them must give the other a written notice that he alone has done so. In this latter case, the recipient of the notice then has a period of four weeks within which, if he does not wish to go ahead with this procedure, he may instead invoke the arbitration procedure under Clause 28.

This amendment is needed to ensure that the arbitration procedure under Clause 28 continues to be available, notwithstanding that an attempt has been made to activate the alternative procedure envisaged by Clause 29 in a case where one of the parties wishes to terminate the alternative procedure within the four weeks allowed for him to do so. I beg to move.

On Question, amendment agreed to.

Earl Howe moved Amendment No. 77:


Page 13, line 44, at end insert ("and the other has not given a notice under section 28(2) of this Act in relation to the dispute before the end of that period.").

On Question, amendment agreed to.

Clause 29, as amended, agreed to.

Clause 30 agreed to.

Lord Gallacher moved Amendment No. 78:


After Clause 30, insert the following new clause:

Section 22 of the Solicitors Act 1974 not to apply

(". Subsection (1) of section 22 of the Solicitors Act 1974 shall not apply to any member of the Royal Institution of Chartered Surveyors drawing or preparing any instrument under this Act.").

The noble Lord said: The effect of the amendment would be to enable valuers and surveyors to prepare agreements for the letting of farm business tenancies of any length. I am advised that the Law of Property Act 1925 requires any lease for a fixed term of more than three years to be by deed. The effect of the Solicitors Act is to make it an offence for anyone other than a barrister or solicitor to prepare deeds.

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At present, most agricultural tenancy agreements, which may now offer lifetime security, are prepared by agents who will no longer be able to prepare agreements for fixed terms of more than three years without committing an offence and exposing themselves to a fine. That adds an element of difficulty in cost to the preparation of farm business tenancies.

It is in the interests of the industry that as many agreements for the letting of farm business tenancies as possible are made in writing. The amendment removes one disincentive to that end by making it easier and cheaper to put agreements into writing since there will be no need to refer to lawyers the finalisation of leases for three years or longer.

Without the amendment, the requirement of the Solicitors Act may encourage the parties to use their agents to let on annual tenancies rather than taking a longer-term perspective than might otherwise have been intended. In particular, in regard to smaller parcels of land, the Act may encourage the parties to let without formalising the terms in writing at all, with all the uncertainty that may flow from that.

Agricultural lettings are a specialist subject with which qualified surveyors and valuers may have more familiarity and expertise than some solicitors and so may be more likely to avoid serious mistakes. I warm to that part of my brief. The amendment does nothing to prevent the current practice of referring agreements for complex situations to solicitors with specialist agricultural expertise but does allow for practical, experienced handling of conventional situations. I beg to move.

5.30 p.m.

The Earl of Kinnoull: I declare an interest and I warm to the noble Lord, Lord Gallacher, who moved an amendment yesterday evening which I felt was not in the interests of the Royal Institution of Chartered Surveyors. I am delighted that he has restored his reputation and I warmly support the amendment.

Earl Howe: As the law currently stands, farm business tenancies of less than three years, including tenancies from year to year, could be drawn up by anybody. Farm business tenancies for more than three years could be drawn up both by solicitors and, following the reform of the conveyancing market brought in by the Government in 1985, by licensed conveyancers. There is thus, as a result of these reforms, sufficient competition in the market for this type of service to ensure that landlords and tenants will be able to have their farm business tenancies drawn up at a reasonable cost.

In the case of the medium and longer term tenancies which we expect the Bill to encourage, the farm business tenancy agreement is a very important document for both sides. As with any other important business contract entered into by responsible businessmen, it is essential that the legal details are absolutely correct. There are certain legal prescriptions contained in the Bill which must be adhered to and, where parties have negotiated particular covenants, rights or obligations, it is in their own best interests that

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the formal tenancy agreement is legally watertight. In that respect there is a direct comparison with commercial business lettings.

I have no wish whatever to cast any aspersions on the widely recognised abilities of members of the RICS, who will have a very important role to play in advising parties during the process of negotiating a farm business tenancy. There is no question about that. But I think it right in the interests of both landlord and tenant that the formal instrument of agreement should be drawn up by a person with suitable qualifications and experience for that particular task.

While I appreciate the sentiments expressed by the noble Lord, I differ from him. I believe that this is a clear instance where legal expertise is warranted and, on reflection, I hope that he will agree.

Lord Hylton: I happen to be a chartered surveyor but I have never practised so I do not think that I have an interest in the matter. It seems to me that the noble Earl has quite failed to understand the point and the thrust of the amendment; namely, that, for a long time, chartered surveyors and valuers have been preparing normal farm tenancy agreements which, while in theory they last only one year, in practice last for a lifetime and in some cases may last for more than one generation. Therefore, they have plenty of adequate expertise to enable them to draw up agreements which may last for two years, three years, 10 years—a short or medium-term contract.

Moreover, they are experienced in very large lettings which may not be of the type envisaged in the Bill. I should have thought that chartered surveyors are perfectly competent and, in my view, it is not always necessary to have a solicitor devoting his legal knowledge to such matters.


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